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Mexico's Modelo Sells Convenience Stores to Circle K Franchisee

Anheuser-Busch InBev Unit to Focus on Core Brewing Business

By

Anthony Harrup

Feb. 10, 2014 11:13 a.m. ET

MEXICO CITY—Mexican brewer
Grupo Modelo
agreed to sell its chain of convenience stores to the operator of Circle K convenience stores in Mexico as it intends to concentrate on its core brewing business.

Modelo, a unit of
Anheuser-Busch InBev,
said Monday the sale of 878 Extra stores will allow it to focus on beer production and distribution. "We will continue to develop strong bonds with Circulo K, and they will continue to be one of our most important clients," Modelo said in a release.

Circulo K, as the Circle K franchise is known in Mexico, said the acquisition will bring its number of stores to more than 1,000, making it one of the main players in the convenience-store market in the country and extending its geographical reach. The deal requires clearance from Mexico's antitrust commission.

The biggest operator of convenience stores in Mexico is
Fomento Economico Mexicano,
or Femsa, of Monterrey, which had 11,210 Oxxo stores open at the end of September. Oxxo is followed by 7-Eleven, which has close to 1,700 stores in the country.

Femsa and Modelo competed for years in convenience stores and brewing. Femsa sold its beer business in 2010 to
Heineken
NV for cash and a 20% stake in the Dutch brewer. Modelo, Mexico's biggest brewer and the maker of top U.S. import beer Corona Extra, is owned by AB InBev, which last year bought the 50% of Modelo that it didn't already own.

Circulo K is backed by Mexican textiles company Kaltex, which also runs a chain of clothing stores.